Securetech Innovations, Inc. - Quarter Report: 2020 September (Form 10-Q)

SECURETECH INNOVATIONS, INC.

ASSETS

LIABILITIES AND STOCKHOLDERS’ (DEFICIT)

The accompanying notes to the financial statements are an integral part of these statements.

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SECURETECH INNOVATIONS, INC.

(unaudited)

The accompanying notes to the financial statements are an integral part of these statements.

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SECURETECH INNOVATIONS, INC.

For the period from December 31, 2018 to September 30, 2020

(unaudited)

The accompanying notes to the consolidated financial statements are an integral part of these statements.

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SECURETECH INNOVATIONS, INC.

(unaudited)

The accompanying notes to the financial statements are an integral part of these statements.

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SECURETECH INNOVATIONS, INC.

September 30, 2020

(unaudited)

NOTE 1 – Summary of Significant Accounting Policies

Organization

SecureTech Innovations, Inc. (“Company” or “SecureTech”) was incorporated under the laws of the State of Wyoming on March 2, 2017, under the name SecureTech, Inc.  The Company amended its Articles of Incorporation on December 20, 2017, to change its name to SecureTech Innovations, Inc.

SecureTech is an emerging growth company focused on developing and marketing personal and automobile security and safety devices and technologies.  Through a licensed patent, SecureTech has created its initial product, Top Kontrol.  Top Kontrol is unlike any other product on the market – it prioritizes the safety of the driver and passengers.  Not only does Top Kontrol protect your vehicle from unattended theft like other car alarms, but it is the only anti-theft and personal safety device able to thwart an active carjacking attempt without any action by the driver.

Through its advanced design and use of a licensed patent, Top Kontrol can tell the difference between an authorized driver and an unauthorized thief or carjacker through the use of strategically placed sensors in the automobile and a unique FOB device hidden on the authorized driver’s person.  Regardless of whether someone tries to steal your vehicle while it is innocently idling unattended in the parking lot or take it by force at gunpoint, Top Kontrol will only allow the unauthorized driver to drive for 15-20 seconds before automatically turning the engine off and preventing any attempt to restart the engine.  This prevents the thief from stealing your car and/or allows the driver sufficient time to run to safety after being threatened at gunpoint.  SecureTech is not aware of any other product on the market that solves the carjacking problem in the manner of Top Kontrol.

Because Top Kontrol is wired into the automobile’s ignition and lighting systems, it must be installed and serviced by a Top Kontrol Certified Technician.

Unaudited Interim Financial Information

The unaudited condensed interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

The balance sheet as of December 31, 2019 has been derived from audited financial statements.

Operating results for the nine months ended September 30, 2020 are not necessarily indicative of results that may be expected for the year ending December 31, 2020. These condensed financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2019 filed with the Company’s Annual Report on Form 10-K with the Securities and Exchange Commission on February 21, 2020.

Impact of the COVID-19 (Coronavirus) Pandemic

In December 2019, a novel strain of coronavirus, which causes the disease known as COVID-19, was reported to have surfaced in Wuhan, China. Since then, COVID-19 coronavirus has spread globally. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic and the U.S. government-imposed travel restrictions on travel between the United States, Europe, and many other countries worldwide. The COVID-19 pandemic has significantly negatively affected the global economy, significantly disrupted global supply chains, and created a significant disruption of the financial and retail markets, including a substantial disruption and dampening in consumer demand for the automotive industry, including specialty equipment manufacturers such as ourselves.

Because we began manufacturing and selling Top Kontrol during the nine months ended September 30, 2020, we cannot determine, compare, or estimate with any degree of accuracy to what extent the pandemic may be hindering our sales efforts.  While we believe this pandemic has had a material impact on our business growth and launching Top Kontrol, we do not have

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enough operating history to accurately evaluate or quantify the extent this pandemic may have impacted the following areas of our business:

In addition to the foregoing, we believe that sales for the nine months ended September 30, 2020 were negatively impacted by the continuing COVID-19 pandemic.  In particular, we have encountered numerous delays in establishing a group training and certification program necessary to educate and authorize automobile technicians to safely and properly install and repair our Top Kontrol product.  It is simply not safe for groups of people to gather within the confines of small interior areas, which are typical of most automobile repair bays where we would typically perform this type of hands-on training.

We began hosting modified COVID-19 aware classes towards the end of September 2020.  The revised training and certification program is now being held outdoors in open parking lots.  Participants can now observe personal COVID-19 safety measures, including sanitizing hands, wearing masks, and maintaining social distancing protocols.

Having a limited number of Top Kontrol Certified Technicians available to install Top Kontrol is significantly restricting the number of customer installations being performed, which is subsequently influencing retail customers to delay purchases until they can have it readily installed in their vehicle.

However, because we did not commence marketing and selling Top Kontrol prior to this pandemic, we have no historical perspective to quantify or speculate on the extent COVID-19 is having on our sales and overall financial condition.

Uncertainties regarding the economic impact of COVID-19 are likely to result in sustained market turmoil while businesses remain shuttered (or operating at diminished capacity).  Many prospective customers remain home under local “lockdown” mandates, guidelines, and a general fear of leaving the safety of their homes, which may also negatively impact our business, financial condition, and cash flows for an unknown length of time.

Uncertainties regarding the economic impact of COVID-19 are likely to result in sustained market turmoil while businesses remain shuttered (or operating at diminished capacity).  Many prospective customers remain home under local “lockdown” mandates, guidelines, and a general fear of leaving the safety of their homes, which may also negatively impact our business, financial condition, and cash flows for an unknown length of time.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”) for financial information and in accordance with the Securities and Exchange Commission’s (“SEC”) Regulation S-X.  They reflect all adjustments which are, in the opinion of the Management, necessary for a fair presentation of the financial position and operating results as of and for the fiscal period ended September 30, 2020.

Use of Estimates

The accompanying financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America.  Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment.  Actual results may vary from these estimates.

The worldwide spread of COVID-19 has resulted in a global slowdown of economic activity which is likely to decrease demand for a broad variety of goods and services, while also disrupting supply chains, sales channels, marketing activities, and general business operations for an unknown period of time until the disease is contained at local, regional, and worldwide levels. At this point, the extent to which COVID-19 may impact our financial condition or results of operations is uncertain, and as of the date of issuance of these financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, judgments, or adjust the carrying value of our assets or liabilities. These estimates may change as new events occur and additional information is obtained, and are recognized in the financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to our financial statements.

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Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents.  As of September 30, 2020, the Company had no cash equivalents.

Fair Value of Financial Instruments

ASC 820, “Fair Value Measurements” and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:

Inventory and Cost of Sales

Inventory is stated at the lower of cost or realizable value, using the weighted average cost method. When an impairment indicator suggests that the carrying amounts of inventories might not be recoverable, the Company reviews such carrying amounts and estimates the net realizable value based on the most reliable evidence available at that time. An impairment loss is recorded if the net realizable value is less than the carrying value. Impairment indicators considered for these purposes are, among others, obsolescence, decrease in market prices, damage, and a firm commitment to sell.

Net Loss per Share Calculation

Basic net loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period.   Diluted earnings per shares is computed similarly to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.  SecureTech excludes all potentially dilutive securities from its diluted net loss per share computation since their effect would be anti-dilutive because SecureTech recorded a loss for the nine months ended September 30, 2020.

Revenue Recognition

Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers.

The Company’s primary source of revenue is from the sale of our Top Kontrol product.  We began selling Top Kontrol in late April 2020.

Top Kontrol requires installation by a Certified Top Kontrol Technician.  To become a Certified Top Kontrol Technician, an automotive technician must complete a one-day hands-on course hosted by the Company.  Failure to have Top Kontrol installed by a Certified Top Kontrol Technician voids the product’s limited liability warranty.

Because of this professional installation requirement, the Company generally sells its products to and through Authorized Dealers and Certified Top Kontrol Technicians.  In the instances where the Company sells directly to the end-user, product installation is performed by authorized Company personnel.

Revenue is recognized when performance obligations under the terms of a contract with our customers are satisfied.  Revenue is recorded net of marketing allowances, volume discounts, and other forms of variable consideration.  Generally, this occurs

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with the transfer of control of our product to the customer and payment has been received.  The Company does not offer terms or credit to any of its customers.

Revenue Recognition; ASC 606 Five-Step Model

Under ASC 606, the Company recognizes revenue from the sale of service contracts by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

Revenue Recognition; General Right of Return

Customers are allowed to return goods that are defective (warranty returns).  In some instances, customers may be allowed to return a limited number of units for periodic stock adjustment returns.  Such stock adjustment returns would be limited to no more than 5% of their total units sold.

As is standard in the industry, we only will accept returns from active customers.  If a customer ceases doing business with us, we have no further obligation to accept additional product returns from that customer.

Income Taxes

The Company accounts for income taxes pursuant to FASB ASC 740, Income Taxes.  Under FASB ASC 740-10-25, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes.  The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.

The Company maintains a valuation allowance with respect to deferred tax assets.  The Company establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration the Company’s financial position and results of operations for the current period.  Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.

Changes in circumstances, such as the Company generating taxable income, could cause a change in judgment about its ability to realize the related deferred tax asset.  Any change in the valuation allowance will be included in income in the year of the change in estimate.

Fiscal Year

The Company elected December 31st for its fiscal year-end.

Recent Accounting Pronouncements

There are various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s financial position, results of operations or cash flows.

NOTE 2 – GOING CONCERN

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements during the fiscal period ended September 30, 2020, the Company has not established a source of revenues sufficient to cover its operating costs, and as such, has incurred an operating loss since its inception.  Further, as of September 30, 2020, the Company had an accumulated deficit of ($326,511).  These and other factors raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s existence is dependent upon management’s ability to develop profitable operations and to obtain additional sources of financing. There can be no assurance that the Company’s financing efforts will result in profitable operations or the resolution of the Company’s liquidity problems. The accompanying statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

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NOTE 3 – OTHER CURRENT ASSETS

Other current assets are comprised of a variety of assets such as deposits, undeposited funds, and so forth.  The following table summarizes the Company’s current assets as of September 30, 2020 and December 31, 2019:

NOTE 4 – INVENTORIES

Inventory is stated at the lower of cost or realizable value, using the weighted average cost method. When an impairment indicator suggests that the carrying amounts of inventories might not be recoverable, the Company reviews such carrying amounts and estimates the net realizable value based on the most reliable evidence available at that time. An impairment loss is recorded if the net realizable value is less than the carrying value. Impairment indicators considered for these purposes are, among others, obsolescence, decrease in market prices, damage, and a firm commitment to sell.  The following table summarizes the Company’s inventories as of September 30, 2020 and December 31, 2019:

NOTE 5 – STOCKHOLDERS’ EQUITY

Preferred stock

The Company has authorized 50,000,000 shares of preferred stock, $0.001 par value.  The Company’s Board of Directors is authorized, without further action by the shareholders, to issue shares of preferred stock and to fix the designations, number, rights, preferences, privileges and restrictions thereof, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences and sinking fund terms.

As of September 30, 2020, the Company had no classes and -0- shares of preferred stock issued and outstanding.

Common stock

The Company has authorized 500,000,000 shares of common stock, with a par value of $0.001 per share.

2020 Issuances

During the nine months ended September 30, 2020, the Company conducted a private placement of its securities in the form of a Unit offering, which each Unit included one share of the Company’s common stock and four stock purchase warrants with incremental exercise prices and expiration dates (See Note 6 – Warrants).  Pursuant to this offering the Company sold 439,300 Units for $65,894 in cash, or $0.15 a Unit, resulting in the Company issuing an aggregate of 439,300 shares of its common stock.  This offering was closed on June 30, 2020.

As of September 30, 2020, the Company had 170,442,300 shares of common stock issued and outstanding.

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NOTE 6 – WARRANTS

The following table summarizes information with respect to outstanding warrants to purchase shares of the Company’s common stock as of September 30, 2020.

2020 Issuances

During the nine months ended September 30, 2020, the Company undertook a private placement of its securities in the form of a Unit offering, which each Unit included one share of the Company’s common stock and four stock purchase warrants with incremental exercise prices and expiration dates. An aggregate of 1,757,200 stock purchase warrants were issued pursuant to this offering, which was closed on June 30, 2020.

The warrants were valued using the Black-Scholes model with a 53.0% volatility rate and discount rates ranging from 0.16% - 0.21% for a total fair value of $19,257.

A summary of the warrant activity for the nine months ended September 30, 2020 is as follows:

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on warrants with an exercise price less than the Company’s stock price of $0.15 (based on the most recent cash sale price) as of September 30, 2020, which would have been received by the warrant holders had those warrant holders exercised their options as of that date.

NOTE 7 – RELATED PARTY FOUNDER’S SHARE ISSUANCES

On March 2, 2017, the Company issued an aggregate of 175,000,000 shares of its common stock, $0.001 par value, as Founder’s Shares with $-0- value.  

Of these original Founder’s Shares 80,000,000 were issued to the Company’s officers, 75,000,000 to an entity controlled by one of the Company’s directors, and 20,000,000 to outside consultants who assisted with the Company’s formation and early organization.

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NOTE 8 – CONTINGENCY/LEGAL

As of September 30, 2020, and during the preceding ten years, no director, person nominated to become a director or executive officer, or promoter of the Company has been involved in any legal proceeding that would require disclosure hereunder.

From time to time, the Company may become subject to various legal proceedings and claims that arise in the ordinary course of our business activities.  However, litigation is subject to inherent uncertainties for which the outcome cannot be predicted.  Any adverse result in these or other legal matters could arise and cause harm to the Company’s business.  The Company currently is not party to any claim or litigation the outcome of which, if determined adversely to the Company, would individually or in the aggregate be reasonably expected to have a material adverse effect on the Company’s business.

NOTE 9 – SUBSEQUENT EVENTS

No other material events or transactions have occurred during this subsequent event reporting period which required recognition or disclosure in the financial statements.

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Our independent registered public accounting firm has issued a going concern opinion in their audit report dated February 21, 2020, which can be found in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 21, 2020.  This means that our auditors believe there is substantial doubt that we can continue as an ongoing business for the next 12 months.

The following discussion should be read in conjunction with our financial statements and the notes thereto and the other information included in this Quarterly Report as filed with the SEC on Form 10-Q.

Limited Operating History; Need for Additional Capital

There is limited historical financial information about us upon which to base an evaluation of our performance.  We are an emerging growth business with limited operating history.  We cannot guarantee that we will be successful in our business operations.  Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns, such as increases in marketing costs, increases in administration expenditures associated with daily operations, increases in accounting and audit fees, and increases in legal fees related to regulatory filings and compliance measures.

As of September 30, 2020, we had incurred ($326,511) in losses since our inception on March 2, 2017.  We have not achieved profitability and expect to continue to incur net losses throughout the fiscal year ending December 31, 2020, and potentially into subsequent fiscal periods.  We anticipate incurring significant operating expenses and, as a result, will need to generate sufficient revenue to achieve profitability, which may never occur.  Even if we do achieve profitability, we may be unable to sustain or increase profitability on an ongoing basis, which could cause us to go out of business.

To become profitable and competitive, we have to successfully market and sell our current product, Top Kontrol, and continue to innovate and develop new personal and automobile security and safety devices and technologies that will be accepted by consumers.  We anticipate relying on equity sales of our common stock to continue to fund our business operations until we can generate sufficient revenues to cover our operating expenses, which may never happen.  Issuances of additional shares will result in dilution to our then existing stockholders.  There is no assurance that we will be able to make any further sales of our equity securities or arrange for debt or other financings to fund our planned business activities.  We may also rely on loans from our Management or other shareholders.  However, there are no assurances that Management or any of our shareholders will provide us with any additional funds in the future.

We are continually exploring new sources of financing to meet our need for additional cash, including raising funds through sales of our equity securities and loans.  We cannot provide any assurances that our efforts to secure additional financing will be successful.  We cannot guarantee that future funding will be available to us on acceptable terms.  If financing is not available on satisfactory terms, we may be unable to continue, develop, or expand our operations.  Further, future equity financing could result in additional and substantial dilution to existing shareholders.

Plan of Operations

SecureTech Innovations, Inc. (“Company” or “SecureTech”) was incorporated under the laws of the State of Wyoming on March 2, 2017, under the name SecureTech, Inc.  The Company amended its Articles of Incorporation on December 20, 2017, to change its name to SecureTech Innovations, Inc.

SecureTech is an emerging growth company focused on developing and marketing personal and automobile security and safety devices and technologies.  Through a licensed patent, SecureTech has created its initial product, Top Kontrol.  Top Kontrol is unlike any other product on the market – it prioritizes the safety of the driver and passengers.  Not only does Top Kontrol protect your vehicle from unattended theft like other car alarms, but it is the only anti-theft and personal safety device able to thwart an active carjacking attempt without any action by the driver.

Through its advanced and patented design, Top Kontrol can tell the difference between an authorized driver and an unauthorized thief or carjacker through the use of strategically placed sensors in the automobile and a unique FOB device hidden on the authorized driver’s person.  Regardless of whether someone tries to steal your vehicle while it is innocently idling unattended in a parking lot or attempt to take it by force at gunpoint, Top Kontrol will only allow the unauthorized driver to drive for 15-20 seconds before automatically turning the engine off and preventing any attempt to restart the engine.  This prevents the thief from stealing your car and allows the occupants sufficient time to run for safety in the event of an armed carjacking.  SecureTech is not aware of any other product on the market that solves the carjacking problem in the manner of Top Kontrol.

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Because Top Kontrol is wired into the automobile’s ignition and lighting systems, it must be installed and serviced by a Top Kontrol Certified Technician.

Top Kontrol Product

Top Kontrol is SecureTech’s first anti-theft and automobile safety product.  Utilizing exclusive licensed patented technology created by our Founder, Kao Lee, SecureTech has developed a very competitively priced product that significantly outperforms all other known products currently on the market.

Key Advantages of Selecting Top Kontrol:

Unlike our competitors’ products, which are designed to protect the automobile from unattended theft primarily, we’ve developed Top Kontrol to put driver and passenger safety first while still protecting your car from theft – even while the engine is running.  We believe Top Kontrol to be the only anti-theft and personal safety automobile device able to thwart a carjacking attempt without any action by the driver.  

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Through its advanced design and patented technology, Top Kontrol can tell the difference between an authorized driver and an unauthorized thief or carjacker.  Regardless of whether someone tries to steal your car while it is idling unattended or take it by force using a gun, Top Kontrol will automatically shut off the engine after 15-20 seconds after detecting an unauthorized driver.  Top Kontrol will also prevent the unauthorized driver from restarting the engine, even if the keys are in the ignition, thereby preventing the thief from stealing your car and allowing you sufficient time to run to safety after being threatened at gunpoint.

Because Top Kontrol is connected to the automobile’s ignition and lighting systems, it must be installed and serviced by a Top Kontrol Certified Technician.

For additional information on our Top Kontrol product, please visit our product website www.topkontrol.com.

Made in the USA

SecureTech presently uses US-based contract manufacturers to manufacture and assemble its products.  SecureTech does not have any long-term or exclusivity agreements with any contract manufacturer and is free to change or negotiate with new contract manufacturers at its sole discretion.

Additionally, Management is presently exploring the feasibility of establishing its own warehouse and manufacturing facility in Florida.  Our goal is to have this facility operational sometime within the first half of 2021 to facilitate international sales and exports while reducing overall manufacturing and shipping expenses.

All of SecureTech’s products proudly carry the “Made in the USA” designation.

Competition

SecureTech faces formidable competition in every aspect of our business.  The success or failure of our company will depend largely upon the ability of our management to develop competitive products and successfully market them to attract a sufficient number of new customers, which will allow us to generate sufficient revenues to become profitable.

SecureTech competes against better-established competitors with substantially greater financial resources and longer operating histories.  Our competitors’ resources and market presence may provide them with advantages in marketing, purchasing, and negotiating leverage.  Some of our better-known competitors include Viper (www.viper.com) and LoJack Corporation (www.lojack.com).  Below is a table providing a comparative overview of how Top Kontrol stacks up to our competitors’ product offerings:

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(1)Viper 5806 car alarm model. 

(2)LoJack^® Stolen Vehicle Recovery System. 

In addition to the competitors listed above, we will be competing with other lesser-known competitors as well as competitors presently not known to us or, possibly, not even formed yet.

We believe that our targeted industry is sufficiently large enough that we will be able to compete successfully against our competitors with our existing and future products.  However, it is essential to note that the underlying product technology is always evolving and expanding with new competitors continuously innovating better products that could eventually outperform our then offered products or, worse, possibly render them obsolete.

Sales and Marketing

SecureTech intends to use a two-pronged approach to marketing for our current and future products to prospective customers, including direct marketing efforts and authorized dealer sales.  

Direct Marketing

SecureTech intends to build brand and product awareness through traditional marketing avenues, including:

Authorized Dealer/Licensed Installer Sales

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SecureTech is internally developing a sales team of representatives that will sell SecureTech’s products to car dealerships (new and used), car audio stores, body shops, electronics stores, and other similar venues.  SecureTech may also decide in the future to augment its own sales force with commission-based independent sales representatives, both domestically and internationally.

Government Regulation

SecureTech is subject to domestic and international laws and regulations that relate directly or indirectly to its products and operations.  These laws and regulations include common business practices, tax rules and securities regulations pertaining to the operation of its business, and product warranties and safety requirements.  SecureTech believes that the effects of existing or probable governmental regulations will be additional responsibilities of Management to ensure that it remains in compliance with all applicable regulations as they apply to the SecureTech’s products as well as ensuring that SecureTech does not infringe on any proprietary rights of others with respect to its products.  SecureTech will also need to maintain accurate financial records in order to remain complaint with securities regulations as well as any corporate tax liability it incurs.  

Compliance with Environmental Laws

We have not incurred and do not anticipate incurring any expenses associated with environmental laws.

Research and Development Expenditures

During the nine months ended September 30, 2020, SecureTech incurred $430 in new product research and development expenses.

SecureTech is presently developing a second automotive product that will be offered either as a standalone product or as an integrated upgrade to our current Top Kontrol product.  This new product is being engineered with a focus to help save the lives of infants and small children.  More information about this product will be released after a patent application has been filed and prototype testing begins.  SecureTech anticipates incurring approximately $20,000 in research and development expenses during the second half of the fiscal year ending December 31, 2020, and potentially into early 2021.

Patents and Trademarks

We have exclusively licensed United States Patent No. 8,436,721 from Shongkawh, LLC, a related party.  Under the terms of the licensing agreement, SecureTech will pay Shongkawh two-percent (2%) of all gross sales generated on all products sold incorporating the technology covered by this patent.

SecureTech has recorded two registered trademarks with the US Patent & Trademark Office (“USPTO”) for the protection of SECURETECH INNOVATIONS and TOP KONTROL.  These registered trademarks have been issued serial numbers 87908006 and 87908032, respectively.

Property and Equipment

Our principal executive offices are at 2355 Highway 36 West, Suite 400, Roseville, MN 55113.  We lease this space for $1,035 per month on a month-to-month basis for the time being.

We do not hold ownership or leasehold interest in any other property or equipment.

Executive Offices and Telephone Number

Our executive office and main telephone number are currently:

Executive OfficeTelephone and E-Mail Contact Information 

2355 Highway 36 WestTel:(651) 317-8990 

Suite 400E-Mail:info@securetechinnovations.com 

Roseville, MN 55113Web:www.securetechinnovations.com 

Web:www.topkontrol.com 

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Jumpstart Our Business Startups Act

In April 2012, the Jumpstart Our Business Startups Act (“JOBS Act”) was enacted into law. The JOBS Act provides, among other things:

In general, under the JOBS Act a company is an emerging growth company if its initial public offering (“IPO”) of common equity securities was effected after December 8, 2011 and the company had less than $1 billion of total annual gross revenues during its last completed fiscal year. A company will no longer qualify as an emerging growth company after the earliest of:

(i)the completion of the fiscal year in which the company has total annual gross revenues of $1 billion or more,  

(ii)the completion of the fiscal year of the fifth anniversary of the company’s IPO;  

(iii)the company’s issuance of more than $1 billion in nonconvertible debt in the prior three-year period, or  

(iv)the company becoming a “larger accelerated filer” as defined under the Securities Exchange Act of 1934.  

The JOBS Act provides additional new guidelines and exemptions for non-reporting companies and for non-public offerings. Those exemptions that impact SecureTech are discussed below.

Financial Disclosure. The financial disclosure in a registration statement filed by an emerging growth company pursuant to the Securities Act of 1933 will differ from registration statements filed by other companies as follows:

(i)audited financial statements required for only two fiscal years; 

(ii)selected financial data required for only the fiscal years that were audited; and 

(iii)executive compensation only needs to be presented in the limited format now required for smaller reporting companies. (A smaller reporting company is one with a public float of less than $75 million as of the last day of its most recently completed second fiscal quarter)  

However, the requirements for financial disclosure provided by Regulation S-K promulgated by the Rules and Regulations of the SEC already provide certain of these exemptions for smaller reporting companies. SecureTech is a smaller reporting company. Currently, a smaller reporting company is not required to file as part of its registration statement selected financial data and only needs audited financial statements for its two most current fiscal years and no tabular disclosure of contractual obligations.

The JOBS Act also exempts the company’s independent registered public accounting firm from complying with any rules adopted by the Public Company Accounting Oversight Board (“PCAOB”) after the date of the JOBS Act’s enactment, except as otherwise required by SEC rule.

The JOBS Act also exempts an emerging growth company from any requirement adopted by the PCAOB for mandatory rotation of the company’s accounting firm or for a supplemental auditor report about the audit.

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Internal Control Attestation. The JOBS Act also provides an exemption from the requirement of the company’s independent registered public accounting firm to file a report on the company’s internal control over financial reporting, although management of the company is still required to file its report on the adequacy of the company’s internal control over financial reporting.

Section 102(a) of the JOBS Act exempts emerging growth companies from the requirements in §14A(e) of the Securities Exchange Act of 1934 for companies with a class of securities registered under the 1934 Act to hold shareholder votes for executive compensation and golden parachutes.

Other Items of the JOBS Act. The JOBS Act also provides that an emerging growth company can communicate with potential investors that are qualified institutional buyers or institutions that are accredited to determine interest in a contemplated offering either prior to or after the date of filing the respective registration statement. The JOBS Act also permits research reports by a broker or dealer about an emerging growth company regardless if such report provides sufficient information for an investment decision. In addition, the JOBS Act precludes the SEC and FINRA from adopting certain restrictive rules or regulations regarding brokers, dealers and potential investors, communications with management and distribution of a research reports on the emerging growth company IPO.

Section 106 of the JOBS Act permits emerging growth companies to submit 1933 Securities Act registration statements on a confidential basis provided that the registration statement and all amendments are publicly filed at least 21 days before the issuer conducts any road show. This is intended to allow the emerging growth company to explore the IPO option without disclosing to the market the fact that it is seeking to go public or disclosing the information contained in its registration statement until the company is ready to conduct a roadshow.

Election to Opt Out of Transition Period. Section 102(b) (1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a 1933 Act registration statement declared effective or do not have a class of securities registered under the 1934 Act) are required to comply with the new or revised financial accounting standard.

The JOBS Act provides a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. SecureTech has elected not to opt out of the transition period pursuant to Section 107(b).

Results of Operations

Comparison of Three Months Ended September 30, 2020 and 2019

The following table sets forth the results of our operations for the three months ended September 30, 2020 and 2019.

Sales

Sales for the three months ended September 30, 2020 were $4,730, compared to $-0- for the same period of 2019.  All sales were attributable to Top Kontrol.

Sales for the three months ended September 30, 2020 were negatively impacted by the continuing COVID-19 pandemic.  In particular, we have encountered numerous delays in establishing a group training and certification program necessary to educate and authorize automobile technicians to safely and properly install and repair our Top Kontrol product.  It is simply not safe

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for groups of people to gather within the confines of small interior areas, which are typical of most automobile repair bays where we would typically perform this type of hands-on training.

We began hosting modified COVID-19 aware classes towards the end of September 2020.  The revised training and certification program is now being held outdoors in open parking lots.  Participants can now observe personal COVID-19 safety measures, including sanitizing hands, wearing masks, and maintaining social distancing protocols.

Having a limited number of Top Kontrol Certified Technicians available to install Top Kontrol is significantly restricting the number of customer installations being performed, which is subsequently influencing retail customers to delay purchases until they can have it readily installed in their vehicle.

However, because we did not commence marketing and selling Top Kontrol prior to this pandemic, we have no historical perspective to quantify or speculate on the extent COVID-19 is having on our sales and overall financial condition.

Cost of Goods Sold

Our cost of goods sold consists primarily of purchasing components and circuitry from various vendors then utilizing third-party contract manufacturing facilities to produce our products, with final assembly conducted at our Minnesota headquarters. Cost of goods sold for the three months ended September 30, 2020 was $1,212, compared to $-0- for the same period of 2019.  Cost of goods sold, as a percentage of overall sales, was 25.6% during the three months ended September 30, 2020.

Gross Profit

Gross profit for the three months ended September 30, 2020 was $3,518, compared to $-0- for the same period of 2019.  Our gross profit margin was 74.4% during the three months ended September 30, 2020.

Operating Expenses

Our operating expenses consisted of two components: general and administrative expenses and research and development expenses.  Total operating expenses were $20,222 in the three months ended September 30, 2020, compared to $20,529 in the same period of 2019, representing a decrease in operating expenses of ($307), or (1.5%), during the three months ended September 30, 2020.

General and administrative expenses consisted of selling, general and administrative expenses, legal and accounting expenses, and regulatory compliance expenses.  During the three months ended September 30, 2020 our general and administrative expenses were $19,792, compared to $12,569 for the same period of 2019, representing an increase of $7,223, or 57.5%.  The increase in general and administrative expenses is the result of higher accounting and regulatory compliance expenses related to initiating Top Kontrol sales.

Research and development expenses are expenses related to the development and certification of our products.  During the three months ended September 30, 2020 our research and development expenses were $430, which were attributable to a new product under development.  Our research and development expenses for the same period of 2019 were $7,960, which were attributable to final development expenses associated with Top Kontrol.  The result was a decrease in research and development expenses of ($7,530), or (94.6%). Research and development expenses will continue to vary considerably, depending on the product cycle.  Presently, we are developing our second product and expect to incur continued research and development expenses prior to its commercial release.

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Loss From Operations

As a result of the foregoing, our loss from operations was ($16,704) during the three months ended September 30, 2020, compared with ($20,529) for the same period of 2019.  This ($3,825), or (18.6%), decrease in our loss from operations is from increased sales of Top Kontrol.

Net Loss

As a result of the foregoing, our net loss was ($16,704) during the three months ended September 30, 2020, compared with ($20,529) for the same period of 2019.  This ($3,825), or (18.6%), decrease in our net loss is from increased sales of Top Kontrol.

Comparison of Nine Months Ended September 30, 2020 and 2019

The following table sets forth the results of our operations for the nine months ended September 30, 2020 and 2019.

Sales

Sales for the nine months ended September 30, 2020 were $11,479, compared to $-0- for the same period of 2019.  All sales were attributable to Top Kontrol.

Sales for the nine months ended September 30, 2020 were negatively impacted by the continuing COVID-19 pandemic.  In particular, we have encountered numerous delays in establishing a group training and certification program necessary to educate and authorize automobile technicians to safely and properly install and repair our Top Kontrol product.  It is simply not safe for groups of people to gather within the confines of small interior areas, which are typical of most automobile repair bays where we would typically perform this type of hands-on training.

We began hosting modified COVID-19 aware classes towards the end of September 2020.  The revised training and certification program is now being held outdoors in open parking lots.  Participants can now observe personal COVID-19 safety measures, including sanitizing hands, wearing masks, and maintaining social distancing protocols.

Having a limited number of Top Kontrol Certified Technicians available to install Top Kontrol is significantly restricting the number of customer installations being performed, which is subsequently influencing retail customers to delay purchases until they can have it readily installed in their vehicle.

However, because we did not commence marketing and selling Top Kontrol prior to this pandemic, we have no historical perspective to quantify or speculate on the extent COVID-19 is having on our sales and overall financial condition.

Cost of Goods Sold

Our cost of goods sold consists primarily of purchasing components and circuitry from various vendors then utilizing third-party contract manufacturing facilities to produce our products, with final assembly conducted at our Minnesota headquarters.  Cost of goods sold for the nine months ended September 30, 2020 was $2,822, compared to $-0- for the same period of 2019.  Cost of goods sold, as a percentage of overall sales, was 24.6% during the nine months ended September 30, 2020.

Gross Profit

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Gross profit for the nine months ended September 30, 2020 was $8,657, compared to $-0- for the same period of 2019.  Our gross profit margin was 75.4% during the nine months ended September 30, 2020.

Operating Expenses

Our operating expenses consisted of two components: general and administrative expenses and research and development expenses.  Total operating expenses were $52,591 in the nine months ended September 30, 2020, compared to $45,433 in the same period of 2019, representing a increase in operating expenses of $7,160, or 15.8%, during the nine months ended September 30, 2020.

General and administrative expenses consisted of selling, general and administrative expenses, legal and accounting expenses, and regulatory compliance expenses.  During the nine months ended September 30, 2020 our general and administrative expenses were $52,161, compared to $37,473 for the same period of 2019, representing an increase of $14,688, or 39.2%.  The increase in general and administrative expenses is the result of higher accounting and regulatory compliance expenses related to initiating Top Kontrol sales.

Research and development expenses are expenses related to the development and certification of our products.  During the nine months ended September 30, 2020 our research and development expenses were $430, which were attributable to a new product under development.  Our research and development expenses for the same period of 2019 were $7,960, which were attributable to final development expenses associated with Top Kontrol.  The result was a decrease in research and development expenses of ($7,530), or (94.6%).  Research a development expenses will continue to vary considerably, depending on the product cycle.  Presently, we are developing our second product and expect to incur continued research and development expenses prior to its commercial release.

Loss From Operations

As a result of the foregoing, our loss from operations was ($43,934) during the nine months ended September 30, 2020, compared with ($45,433) for the same period of 2019.  This ($1,497), or (3.3%), decrease in our loss from operations is from increased sales of Top Kontrol.

Net Loss

As a result of the foregoing, our net loss was ($43,934) during the nine months ended September 30, 2020, compared with ($45,433) for the same period of 2019.  This ($1,497), or (3.3%), decrease in our net loss is from increased sales of Top Kontrol.

Total Stockholders’ Equity.

Our stockholders’ equity was $156,474 as of September 30, 2020.

Liquidity and Capital Resources

Our principal demands for liquidity are related to our efforts to generate sales and produce inventory, and for expenditures related to sales, regulatory compliance, and general corporate purposes.  We intend to meet our liquidity demands, including capital expenditures related to the manufacture of inventory and the expansion of our business, primarily through cash flow provided by operations and sales of our securities.

We rely primarily on internally generated cash flow and available working capital to support operations and growth.  As of September 30, 2020, we did not have any credit facilities.  Although we believe that our current cash and anticipated cash receipts from sales of Top Kontrol will be sufficient to meet our planned working capital requirements and capital expenditures over the next 12 months, we are always exploring additional sources of new capital.  Without limiting our available options, future financings will most likely be through the sale of additional shares of our common stock.  We may also include warrants,

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options, and/or rights in conjunction with any future issuances of our common stock.  However, we can give no assurance that future financing will be available to us and, if available to us, in amounts or on terms acceptable to us.

We had net working capital of $156,473 as of September 30, 2020, an increase of $21,959, or 16.3%, from net working capital of $134,514 as of December 31, 2019.  The ratio of current assets to current liabilities was 166.2-to-1 on September 30, 2020.

The following is a summary of cash provided by or used in each of the indicated types of activities during the nine months ended September 30, 2020 and 2019:

Net cash used in operating activities was ($93,594), an increase of $48,163 from cash used in operating activities of ($45,431) during the same period of 2019.  The increase in cash used in operating activities was primarily attributable to an increase in inventories.

Net cash provided by financing activities was $65,894, compared to $-0- for the same period of 2019.  The increase in cash inflow from financing activities was from our recently closed Series B Private Placement Offering.  Through this offering, we sold 439,300 Units for $65,894, or $0.15 per Unit.  Each Unit was comprised of the following securities:

Impact of the COVID-19 (Coronavirus) Pandemic

In December 2019, a novel strain of coronavirus, which causes the disease known as COVID-19, was reported to have surfaced in Wuhan, China. Since then, COVID-19 coronavirus has spread globally. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic and the U.S. government-imposed travel restrictions on travel between the United States, Europe, and many other countries worldwide. The COVID-19 pandemic has significantly negatively affected the global economy, significantly disrupted global supply chains, and created a significant disruption of the financial and retail markets, including a substantial disruption and dampening in consumer demand for the automotive industry, including specialty equipment manufacturers such as ourselves.

Because we began manufacturing and selling Top Kontrol during the nine months ended September 30, 2020, we cannot determine, compare, or estimate with any degree of accuracy to what extent the pandemic may be hindering our sales efforts.  While we believe this pandemic has had a material impact on our business growth and launching Top Kontrol, we do not have enough operating history to accurately evaluate or quantify the extent this pandemic may have impacted the following areas of our business:

In addition to the foregoing, we believe that sales for the nine months ended September 30, 2020 were negatively impacted by the continuing COVID-19 pandemic.  In particular, we have encountered numerous delays in establishing a group training and certification program necessary to educate and authorize automobile technicians to safely and properly install and repair our Top Kontrol product.  It is simply not safe for groups of people to gather within the confines of small interior areas, which are typical of most automobile repair bays where we would typically perform this type of hands-on training.

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We began hosting modified COVID-19 aware classes towards the end of September 2020.  The revised training and certification program is now being held outdoors in open parking lots.  Participants can now observe personal COVID-19 safety measures, including sanitizing hands, wearing masks, and maintaining social distancing protocols.

Having a limited number of Top Kontrol Certified Technicians available to install Top Kontrol is significantly restricting the number of customer installations being performed, which is subsequently influencing retail customers to delay purchases until they can have it readily installed in their vehicle.

However, because we did not commence marketing and selling Top Kontrol prior to this pandemic, we have no historical perspective to quantify or speculate on the extent COVID-19 is having on our sales and overall financial condition.

Uncertainties regarding the economic impact of COVID-19 are likely to result in sustained market turmoil while businesses remain shuttered (or operating at diminished capacity).  Many prospective customers remain home under local “lockdown” mandates, guidelines, and a general fear of leaving the safety of their homes, which may also negatively impact our business, financial condition, and cash flows for an unknown length of time.

Going Concern Consideration

Our independent registered public accounting firm has issued a going concern opinion in their audit report dated February 21, 2020, which can be found in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 21, 2020.  This means that our auditors believe there is substantial doubt that we can continue as an ongoing business for the next 12 months.

Off-Balance Sheet Operations

As of September 30, 2020, we had no off-balance sheet activities or operations.

Critical Accounting Policies

Use of Estimates

The accompanying financial statements of SecureTech have been prepared in accordance with generally accepted accounting principles in the United States of America.  Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment.  Actual results may vary from these estimates.

The worldwide spread of COVID-19 has resulted in a global slowdown of economic activity which is likely to decrease demand for a broad variety of goods and services, while also disrupting supply chains, sales channels, marketing activities, and general business operations for an unknown period of time until the disease is contained at local, regional, and worldwide levels. At this point, the extent to which COVID-19 may impact our financial condition or results of operations is uncertain, and as of the date of issuance of these financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, judgments, or adjust the carrying value of our assets or liabilities. These estimates may change as new events occur and additional information is obtained, and are recognized in the financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to our financial statements.

Cash and Cash Equivalents

For purposes of the statement of cash flows, SecureTech considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents. As of September 30, 2020 and December 31, 2019, SecureTech had no cash equivalents.

Fair Value of Financial Instruments

ASC 820, “Fair Value Measurements” and ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:

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Inventory and Cost of Sales

Inventories are stated at the lower of cost or realizable value, using the weighted average cost method. When an impairment indicator suggests that the carrying amounts of inventories might not be recoverable, Management reviews such carrying amounts and estimates the net realizable value based on the most reliable evidence available at that time. An impairment loss is recorded if the net realizable value is less than the carrying value. Impairment indicators considered for these purposes are, among others, obsolescence, decrease in market prices, damage, and a firm commitment to sell.

Net Loss per Share Calculation

Basic net loss per common share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period.   Diluted earnings per shares is computed similarly to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.  SecureTech excludes all potentially dilutive securities from its diluted net loss per share computation since their effect would be anti-dilutive because SecureTech recorded a loss for the nine months ended September 30, 2020.

Revenue Recognition

Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers.

SecureTech’s primary source of revenue is from the sale of our Top Kontrol product.  We began selling Top Kontrol in late April 2020.

Top Kontrol requires installation by a Certified Top Kontrol Technician.  To become a Certified Top Kontrol Technician, an automotive technician must complete a one-day hands-on course hosted by SecureTech.  Failure to have Top Kontrol installed by a Certified Top Kontrol Technician voids the product’s limited liability warranty.

Because of this professional installation requirement, SecureTech generally sells its products to and through Certified Top Kontrol Technicians.  In the instances where SecureTech sells directly to the end-user, product installation is performed by authorized SecureTech personnel.

Revenue is recognized when performance obligations under the terms of a contract with our customers are satisfied.  Revenue is recorded net of marketing allowances, volume discounts, and other forms of variable consideration.  Generally, this occurs with the transfer of control of our product to the customer and payment has been received.  SecureTech does not offer terms or credit to any of its customers.

Revenue Recognition; ASC 606 Five-Step Model

Under ASC 606, SecureTech recognizes revenue from the sale of service contracts by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

Revenue Recognition; General Right of Return

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Customers are allowed to return goods that are defective (warranty returns).  In some instances, customers may be allowed to return a limited number of units for periodic stock adjustment returns.  Such stock adjustment returns would be limited to no more than 5% of their total units sold.

As is standard in the industry, we only will accept returns from active customers.  If a customer ceases doing business with us, we have no further obligation to accept additional product returns from that customer.

Income Taxes

SecureTech accounts for income taxes pursuant to FASB ASC 740, Income Taxes.  Under FASB ASC 740-10-25, deferred tax assets and liabilities are determined based on temporary differences between the bases of certain assets and liabilities for income tax and financial reporting purposes.  The deferred tax assets and liabilities are classified according to the financial statement classification of the assets and liabilities generating the differences.

SecureTech maintains a valuation allowance with respect to deferred tax assets.  SecureTech establishes a valuation allowance based upon the potential likelihood of realizing the deferred tax asset and taking into consideration SecureTech’s financial position and results of operations for the current period.  Future realization of the deferred tax benefit depends on the existence of sufficient taxable income within the carryforward period under the Federal tax laws.

Changes in circumstances, such as SecureTech generating taxable income, could cause a change in judgment about its ability to realize the related deferred tax asset.  Any change in the valuation allowance will be included in income in the year of the change in estimate.

Election to Use Extended Transitional Period Under Jumpstart Our Business Startups Act (“JOBS Act”)

We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the JOBS Act, that allows us to delay the  adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

Recent Accounting Pronouncements

There are various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on SecureTech’s financial position, results of operations or cash flows.

Not applicable since we are a smaller reporting company.

Item 4.  Controls and Procedures

Disclosure Controls and Procedures

For the period covered by this report we conducted an evaluation under the supervision and with the participation of our principal executive officer and principal financial officer we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act).

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Based on Management’s assessment, we have concluded that, as of September 30, 2020, our disclosure controls and procedures were not effective in timely alerting Management to the material information relating to us required to be included in our annual and interim filings with the SEC.

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Management has concluded that our disclosure controls and procedures had the following material weaknesses:

These weaknesses have existed since SecureTech’s inception on March 2, 2017 and, as of September 30, 2020, have not been remedied.

To the extent reasonably possible given our limited resources, we intend to take measures to cure the aforementioned material weaknesses, including, but not limited to, the following:

Since the recited remedial actions will require that we hire or engage additional personnel, these material weaknesses may not be overcome in the near-term due to our limited financial resources. Until such remedial actions can be realized, we will continue to rely on the limited advice of outside professionals and consultants.

Changes in Controls and Procedures

There have been no changes in our internal control over financial reporting that occurred during the period covered by this report that has materially affected or is reasonably likely to materially affect, our internal control over financial reporting.

During the past ten years, no director, person nominated to become a director or executive officer, or promoter of SecureTech has been involved in any legal proceeding that would require disclosure hereunder.

From time to time, we may become subject to various legal proceedings and claims that arise in the ordinary course of our business activities. However, litigation is subject to inherent uncertainties for which the outcome cannot be predicted.  Any adverse result in these or other legal matters could arise and cause harm to our business. We currently are not a party to any claim or litigation the outcome of which, if determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business.

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Item 1A.  Risk Factors

Not applicable since we are a smaller reporting company.

None.

None.

Not Applicable.

None.

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SECURETECH INNOVATIONS, INC. 

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